Sample Category Title

USD/CAD - 1.2680

 
Recent wave: Only wave v of c has ended at 0.9407 and wave C of major A-B-C correction is underway with wave iii ended at 1.4690, wave v of C may bring one more marginal rise probably in 2018

Trend:  Down

 
Original strategy       :

Sell at 1.2770, Target: 1.2570, Stop: 1.2830

Position: -

Target:  -

Stop: -

 
New strategy             :

Sell at 1.2770, Target: 1.2570, Stop: 1.2830

Position: -

Target:  -

Stop:-

Although the greenback has retreated from 1.2735, as long as 1.2625-30 holds, risk of one more corrective rise rise cannot be ruled out, above said resistance would extend the rebound from 1.2414 (wave iii trough) for retracement of early decline in wave iv to 1.2771 (previous resistance as well as 38.2% Fibonacci retracement of wave iii) where renewed selling interest should emerge and bring retreat later, below 1.2625-30 would bring test of 1.2540-50, break there would suggest the rebound from 1.2414 has ended instead, bring further fall to 1.2490-00 but reckon support at 1.2451 would hold on first testing. We are keeping our count that wave v as well as wave (C) ended at 1.3794 and impulsive wave (i ii, i ii) is now unfolding with minor wave iii possibly ended at 1.2414, hence wave iv correction is underway.

In view of this, would be prudent to stand aside for now and look to sell on further subsequent rebound as 1.2771 resistance should limit upside. Above 1.2800-10 would defer and risk a stronger correction to 1.2850, however, still reckon upside would be limited to 1.2880-85 (50% Fibonacci retracement of wave iii) and bring retreat later next week.

To recap, wave B from 1.3066 is unfolding as an a-b-c and is sub-divided as a: 1.2192, b: 1.2716 and wave c is a 5-waver with i: 1.1983, ii: 1.2506, extended wave iii with minor iii at 1.0206, wave iv ended at 1.0781 and wave v as well as wave iii has ended at 0.9931, hence the subsequent choppy trading is the wave iv which is unfolding as (a)-(b)-(c) with (a) leg of iv ended at 1.0854, followed by (b) leg at 1.0108 and (c) leg as well as the wave iv ended at 1.0674. The wave v is sub-divided by minor wave (i): 0.9980, (ii): 1.0374, (iii): 0.9446, (iv): 0.9913 and (v) as well as v has possibly ended at 0.9407, therefore, consolidation with upside bias is seen for major correction, indicated target at 1.3700 and 1.4000 had been met and further gain to 1.4700 would be seen later.

USD/CHF - 0.9666

Original strategy :

Sell at 0.9725, Target: 0.9625, Stop: 0.9760

Position : -

Target :  -

Stop : -

New strategy  :

Sell at 0.9725, Target: 0.9625, Stop: 0.9760

Position : -

Target :  -

Stop : -

As the greenback recovered after yesterday’s selloff to 0.9612, suggesting consolidation above this level would be seen and gain to 0.9700 cannot be ruled out, however, as top has been formed at 0.9773, reckon upside would be limited to 0.9720-25 and bring another decline, below said support at 0.9612 would add credence to this view and extend the fall from 0.9773 top for retracement of recent upmove to 0.9605-10 (50% Fibonacci retracement of 0.9438-0.9773), then 0.9580 but reckon 0.9665 (61.8% Fibonacci retracement) would hold from here. 

In view of this, we are looking to sell dollar on subsequent recovery as 0.9725-30 should limit upside. Only a break of this week’s high at 0.9773 would abort and revive bullishness for the rise from 0.9438 to extend gain to 0.9800-10. 
 

GBP/USD - 1.2995

Most recent candlesticks pattern   : N/A

Trend                                 : Near term down

Tenkan-Sen level                 : 1.2993

Kijun-Sen level                    : 1.2999

Ichimoku cloud top              : 1.3006

Ichimoku cloud bottom        : 1.2992

Original strategy :

Bought at 1.3000, stopped at 1.2965

Position : - Long at 1.3000

Target :  -

Stop : - 1.2965

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

Although cable fell marginally to 1.2952, lack of follow through selling and current rebound suggest further consolidation would take place and another bounce to 1.3025-30 cannot be ruled out, however, reckon upside would be limited to resistance at 1.3059 and price should falter below 1.3085-90 and bring another decline later.

On the downside, below support at 1.2952-53 would signal recent fall from 1.3269 top has resumed and extend weakness to previous chart support at 1.2933 but reckon 1.2900 would hold from here, risk from there has increased for a rebound to take place later. 

EUR/USD - 1.1735

Original strategy  :

Sold at 1.1770, Target: 1.1670, Stop: 1.1770

Position : - Short at 1.1770

Target :  - 1.1670

Stop : - 1.1770

New strategy  :

Hold short entered at 1.1770, Target: 1.1670, Stop: 1.1770

Position : - Short at 1.1770

Target :  - 1.1670

Stop : - 1.1770

As the single currency found support at 1.1689 yesterday and rebounded, suggesting consolidation above this level would be seen, however, as long as resistance at 1.1770 holds, bearishness remains for the fall from 1.1910 top to bring retracement of early upmove, hence further weakness to 1.0670 would be seen but reckon support at 1.1650 would remain intact due to oversold condition. 

In view of this, we are holding on to our short position entered at 1.1770. Above 1.1800-05 would risk another test of 1.1824-30 resistance but only break there would signal the erratic fall from 1.1910 has ended, bring further gain to 1.1855-60 first.

USD/JPY - 109.77

New strategy  :

Stand aside

Position :  -

Target :  -

Stop : -

Despite falling to 109.54 yesterday, the subsequent rebound suggests consolidation above this level would be seen and test of previous support at 110.25 cannot be ruled out, however, break there is needed to signal low has been formed there, bring a stronger rebound to 110.55-60 but reckon upside would be limited to resistance t 110.83 and price should falter below 111.05 (last week’s high).

On the downside, below said support at 109.54 would signal recent decline has resumed and extend weakness to 109.20-25, having said that, loss of near term downward momentum should prevent sharp fall below there and price should stay above 109.00. As near term outlook is mixed, would be prudent to stand aside for now.

The geopolitical fear trade lifted off Wednesday in a classic flight to CHF, JPY and gold on North Korea worries. The Swiss franc led the way, while the Australian dollar lagged. Early in Asia-Pacific trade, the RBNZ held rates while the kiwi fell sharply when the assistant governor McDermott accentuated the change in the language that the currency "needed to" weaken. US PPI and Fed's Dudley are due next. All 3 Premium index shorts are in the green.

Markets are an unparalleled price discovery mechanism, except in once case. Add a bit of fear into the equation – especially fear of life and death – and markets overreact. Recent examples are the trouble in Ukraine and the ebola episode.

War is naturally frightening and uncertain. Now that North Korea has nuclear weapons (or close to it) it will remain a part of the trading landscape. Expect that to provide several opportunities to fade the "fear trade". The first came on Wednesday as stocks and USD/JPY fell only to later recover most of the dip. Bids in bond and gold mostly remain but once the rhetoric cools, so will the trade.

Fading armageddon rests on two critical assumptions: 1) That the US will obliterate North Korea if it uses nuclear weapons. 2) That Kim Jong-Un values his life.

The only conclusion is an extended stalemate, which is really just a continuation of the status quo since the end of the Korean War. The media thrives on inspiring fear but the best trade is almost always on the other side so expect that to remain the case for North Korea.

A more traditional trade is ongoing in the New Zealand dollar after rates were left unchanged at 1.75% and Wheeler said they would remain there for the foreseeable future. But 8 hours later, NZD/USD later fell by anotehr half a cent when McDermott stepped in.

The CAC index has posted losses for a second straight day. In the Thursday session, the index is at 5,126.30, down 0.35% on the day. On the release front, French Industrial Production suffered a sharp decline of 1.1%, worse than the estimate of -0.6%. On Friday, France releases Final CPI and Preliminary Nonfarm Payrolls.

With a quiet week for European indicators, investors have shifted their attention to Southeast Asia, where tensions continue to ratchet higher between North Korea and the US. With the war of words escalating between the two countries, global markets are down, as investors have dumped shares in favor of safe-haven assets, such as gold. North Korea has vowed to retaliate over new sanctions imposed by Washington and has threatened to attack Guam, which is a major US military base. President Trump and North Korean President Kim Jong-un are on a possible collision course, which has caused alarm in South Korea and Japan, strong allies of the US.

Low inflation levels remain a major headache for ECB policymakers. Inflation in the eurozone stood at 1.3% year-on-year in July, well below the bank's inflation target of 2%. Even Germany, whose economy is very strong, is grappling with weak inflation. The ECB's ultra-accommodative policy, which includes interest rates of 0.00% and asset purchases (QE) of 60 billion euros/month, has failed to push inflation upwards. The QE program, which is scheduled to terminate in December, is coming under closer scrutiny. However, December should not be treated as a drop-dead date – the ECB has been careful to state that QE could be extended "if necessary". The ECB holds its next policy meeting in September 7, and there is a strong possibility that the bank will make an announcement regarding tapering QE, which could start in early 2018. The dilemma facing policymakers is that despite a stronger labor market and improved growth, which would suggest that a tighter monetary might be appropriate, inflation levels remain stubbornly low, as the ECB's inflation target of 2% has proven overly optimistic. The ECB is well aware that any talk of tighter policy could send the euro higher, as was the case in June, when investors snapped up euros after Mario Draghi made some hawkish comments at a meeting of central bankers. As far as interest rate moves, the ECB is unlikely to raise rates until its tapering process is well under way, meaning we're unlikely to see any rate moves before the second half of 2018.

Price edges higher ahead the US and the Canadian economic figures. Is strongly bullish on the short term and looks determined to recover much more after the impressive drop. Technically is expected to climb much higher because is located in the buyer's territory, only some poor US numbers will turn the rate to the downside again.

USD/CAD will be driven by the fundamental factors later, remains to see the direction, but a USDX's further increase will force the pair to climb higher as well.

The US PPI may increase by 0.1% in the previous month, matching the 0.1% growth in June, while the Unemployment Claims are expected to remain steady at 240K in the previous week. The Core PPIcould resume the uptrend, is forecasted to increase by 0.2%, more versus the 0.1% in the former reporting period. The Federal Budget Balance and the Natural Gas Storage will release as well, but I don't think that will bring anything.

Keeps rallying after the breakout above the 1.2678 static resistance (resistance turned into support) and looks determined to reach the next upside targets from the warning line (wl3) and the median line (ML) of the major descending pitchfork. Actually, the rate could be attracted by the confluence area formed by the third warning line (wl3) and the median line (ML), where he may find resistance again. However, a valid breakout through the confluence area will accelerate the upside momentum.

I want to remind you that is still under some pressure as long as is trading within the minor descending pitchfork's body and below the median line (ML) of the major descending pitchfork. The upside momentum towards the ML is natural after the failure to reach the LML.

Price is trading in the red and tries to take out some major support levels to be able to start a broader drop. Is trading right above the 38.2% retracement level, which represents the last obstacle that needs to be ignored.

I've said in the previous articles that the bulls seem exhausted and could lose control. EUR/JPY goes down as the Yen is pushed higher by the Nikkei's amazing drop. The JP225 index plunges and is located much below the 19700 static support and is expected to drop much deeper. This situation will help the Yen to dominate the currency market.

EUR/JPY ignored the median line (ml), the upper median line (ML) and the sliding line (sl), but further sell-off will be confirmed below the 38.2% retracement level.

Gold shines despite the USD's growth and is almost to hit a major upside target. You can see that is very close to reach and retest the 38.2% retracement level, where he could find temporary resistance. Is trading above the $1280 per ounce and is expected to climb towards the $1295 per ounce in the upcoming days.